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“Debt (public and private) must concern us all,” says Mario Centeno, Governor of the Banco de Portugal – Observador.



“Debt (public and private) must concern us all,” says Mario Centeno, Governor of the Banco de Portugal - Observador.

Portugal’s economy is set to grow 4.8% in 2021, the Bank of Portugal confirmed Wednesday in the launch of the Economic Bulletin in October. If this growth is confirmed, the banking supervisor points out, it would mean that the gross domestic product (GDP) will it approach the pre-pandemic level by the end of the year… On the other hand, Banco de Portugal Governor Mario Centeno indicated that he sees “Calm” the consequences of the termination of the banking moratorium (in September), but stressed that the Portuguese economy is still heavily indebted and “this should be of concern to all of us.”

“Recovery of activity reflects tackling the pandemic through the vaccination process – with a positive impact on the confidence of economic agents – and the maintenance of expansionary economic policies, ”says Banco de Portugal, also expecting inflation to reach 0.9% in 2021, although they are recognized as“ clearly growing ”risks associated with price increases , that is, the risks that inflation will be higher than expected, the lower, higher.

At the press conference, Mario Centeno spoke about the problems facing the economy at the moment. From the outset, “the country and companies, families came out of the banking moratorium period in September. This is a challenge that everyone is facing now, and I would like to emphasize this. “

We believe that this problem will be overcome in the sense that we are going to resume regular debt service payments either by companies or families, and with the help of measures that have been taken by then, or others that may arise, we calmly consider the problem “, Says Mario Centeno.

“Time bomb”? Bank guarantees “manageable” impact of lifting the moratorium

With regard to public debt, Mario Centeno began by saying that “in the pre-crisis period we saw a very significant reduction in private debt”, in particular, “in 2019, for the first time in many cases, private debt as a percentage of GDP fell. on average in the euro area ”. At this stage of the pandemic, Centeno emphasizes that “we must renew this trend, we must take care of the level of debt, both public and private.“.

The largest debt effort was undertaken by the government in 2021, accounting for 80% of the increase in total debt. This is clearly a concern in the current fiscal system, “said Centeno, adding that” public policy, including the fiscal balance, must be adequate and redouble attention to systemic developments. “

Other short-term risks for the Portuguese economy are associated with the possibility of a worsening situation with the pandemic and, on the other hand, with increased restrictions on the supply (of goods and services). These are factors that may be relevant, for example, in private consumption, which Banco de Portugal recognizes as “amazing” (on the positive side), since the sanitary restrictions were lifted within a year.

This is the quarterly economic newsletter, which, as usual, in the October issue does not include new projections for 2022… The forecast made in June for the next year was 5.6%. Here’s how those forecasts compare to June’s.

Source: Bank of Portugal.

“In the first half of the year, the drop in activity and the subsequent recovery were more pronounced in the service sector, which presupposes wider social contact. Service costs are still lower than in the pre-pandemic period, given persistent precautions, slow tourism recovery and increased use of teleworking, ”says Banco de Portugal. “On the contrary, spending on goods has already risen, albeit constrained by supply disruptions,” the document says.

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In 2021, private consumption will grow by 4.3%, the supervisor adds, highlighting the impact of “rising disposable income and a gradual decline in the savings rate.” “The growth in disposable income in real terms is the result of a rapid recovery in employment and the dynamism of nominal wages, which are mitigated by rising inflation,” notes Banco de Portugal.

Government consumption is expected to grow by 5.2% in real terms after near stabilization in 2020. Investments increased by 5.6%, boosted by the prospects for economic recovery, European funds and loans at low interest rates and guaranteed by the state, ”the Bank of Portugal said in a statement.

Merchandise exports “will grow by 10.7% in 2021 in line with the dynamism of external demand directed at the Portuguese economy,” notes Banco de Portugal, noting that “supply chain disruptions continue to affect this aggregate dynamics until the end of the year. “.

Lack of chips, stopped factories and very expensive energy. The ghosts that haunt the return

On the other hand, “exports of services will continue to be affected by the impact of the pandemic in 2021, up 7% after declining 37.2% in the previous year.” “At the end of the year, exports of services are about 20% lower than before the pandemic,” the supervisor concludes.

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Waterline of Wall Street and Europe with news from China – Markets in a Minute



Red tide in Europe.  Eurozone interest rates worsen – markets in a minute

Euribor climbs three and six months to new highs in almost 14 years

Euribor rates rose today to new highs since the beginning of 2009 in three and six months and remained at the level of 12 months, but also at the maximum level.

The six-month Euribor rate, most used in Portugal for home loans and entering positive territory on June 6, rose today to 2.442% plus 0.006 points, a new high since January 2009.

The six-month average Euribor rose from 1.596% in September to 1.997% in October.

The six-month Euribor has been negative for six years and seven months (from November 6, 2015 to June 3, 2022).

The three-month Euribor, which entered positive territory for the first time since April 2015 on July 14, also rose today, setting a new high since February 2009 at 1.984% plus 0.030 points.

The three-month Euribor was negative between 21 April 2015 and 13 July last year (seven years and two months).

The three-month average Euribor rose from 1.011% in September to 1.428% in October.

For 12 months, Euribor has not changed today as it was once again set at 2.892%, the same value as on Monday and the highest since January 2009.

After rising to 0.005% on April 12, positive for the first time since February 5, 2016, the 12-month Euribor has been in positive territory since April 21.

The average Euribor rate for 12 months increased from 2.233% in September to 2.629% in October.

Euribor began to rise more significantly from February 4, after the European Central Bank (ECB) admitted that it could raise key interest rates this year due to rising inflation in the eurozone, and the trend accelerated with the start of the Invasion of Ukraine on February 24.

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On October 27, to curb inflation, the ECB raised three key interest rates by 75 basis points, the third consecutive increase this year, after raising three interest rates by 50 basis points on July 21. growth after 11 years, and on September 8 by 75 basis points.

Changes in Euribor interest rates are closely linked to increases or decreases in ECB key interest rates.

Three-, six- and 12-month Euribor rates hit record lows respectively: -0.605% on December 14, 2021, -0.554% and -0.518% on December 20, 2021.

Euribor rates are set at the average rate at which a group of 57 eurozone banks are willing to lend money to each other in the interbank market.


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OBSERVATION | Mercadona opens store in Alverca and recruits staff



OBSERVATION |  Mercadona opens store in Alverca and recruits staff

Supermarket company Mercadona is set to open a new store in Alverca do Ribatejo next year and is recruiting 65 full-time and part-time employees.

The company said in a statement that the job offer already reflects the salary update that the company will apply from January 2023, which will see the starting salary of its employees in Portugal at €12,410 per year. Mercadona promises employees a salary increase with an annual increase of 11 percent, which allows them to achieve a monthly salary of 1414 euros gross (including twelfths) for a maximum of 4 years of service. In addition, employees also receive an annual goal-based bonus, which corresponds to an additional salary in the first 4 years and two additional earnings in subsequent years.

“Mercadona continues to focus on job creation and for this reason the new offerings support the drive to build a team focused on excellence and service, highly motivated and aligned with the company’s vision. To this end, in addition to an attractive salary and a permanent contract from day one, Mercadona offers its employees the opportunity to develop within the company.

Mercadona has a differentiated HR policy that focuses on career building, salary growth, equity and internal promotion, “which is one of the main ways to evaluate and create development opportunities.”

Those interested in applying can do so on the Mercadona website under the Jobs section. The company opened its first supermarket on July 2, 2019 in Canidelo, Vila Nova de Gaia and currently has 38 stores in the areas of Porto, Braga, Aveiro, Viana do Castelo, Setubal, Santarem, Viseu and Leiria. In 2021, it achieved sales of 415 million euros and paid 62 million euros in taxes through the Portuguese company Irmãdona Supermercados, based in Vila Nova de Gaia. The year ended with a team of 2,500 employees and an investment in Portugal of 110 million euros. In order to share with the community a part of what it receives, in total Mercadona has already donated 670 tons of basic food in the first half of 2022 through its stores in Portugal.

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“These donations, which are equivalent to more than 11,000 carts, were for more than 30 social canteens, five food banks and other social institutions,” the company explains.

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Another crypto giant falls: BlockFi asks for protection from creditors



Another crypto giant falls: BlockFi asks for protection from creditors

After FTX, it was the turn of crypto lending platform BlockFi to seek creditor protection under Chapter 11 insolvency law in the United States. The lawsuit was filed in a New Jersey court about a month after FTX collapsed.

The company lists more than 100,000 creditors in the documents that started the lawsuit and are cited by various international press outlets. The table features FTX’s second-largest creditor, with $275 million in debt to the platform, which until recently was led by Sam Bankman-Fried.

The list is topped by Ankura Trust, a creditor representation company, with a $729 million loan. BlockFi has already issued a red alert to the market, freezing the withdrawal of assets from the platform.

In July, FTX signed a $400 million credit line agreement with BlockFi with the option to acquire the FTX platform for up to $240 million in the event of default. This came after the collapse of the crypto market in the first half of the year was exacerbated by the collapse of the Terra USD ecosystem and brought the platform to the ground.

The risk of infection remains

The collapse of FTX is starting to infect other “players” in the market. The crisis of confidence experienced during the “collapse” of the Terra USD ecosystem has returned, and several platforms have already frozen the withdrawal of assets. In addition to BlockFi, Genesis, a platform primarily dedicated to crypto lending, has suspended asset buyback operations, citing an “abnormal number of withdrawal requests” for its decision.

Redemption requests made on the platform’s crypto-deposit arm, Genesis Global Capital, have exceeded the company’s liquidity, so the company, along with a team of advisors, is exploring a range of options to try to get back to normal, according to Acting CEO Dear Islim, Bloomberg was quoted as saying. The Gemini Trust, led by the Winklevoss twins, has also decided to freeze the withdrawal of assets from the Gemini Earn program, designed for deposits that earn interest on the “tokens” held. The company guaranteed that this decision would not affect other products or services.

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In turn, the Hong Kong-based platform AXX suspended the withdrawal of assets for ten days this Monday, reporting a lack of liquidity. “If AAX is unable to obtain funding that will allow us to resume operations, we are committed to initiating legal procedures to ensure asset allocation,” the company said in a statement quoted by Bloomberg.

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